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Op-Ed: ​Tax the rich, that's the solution

By Chuck Thompson     Nov 5, 2009 in Politics
First though, we have to figure out who the rich are. Well, that's easily defined. Anyone with more money than you have.
So if your neighbor has more money than you do he should be the one paying the taxes because he can afford it more easily than you can. Right? Good. We've settled that.
There's an article in the The New York Post today which is worth reading. I'll use several quotes from it in this article. Here's the first quote:
New Yorkers are fleeing the state and city in alarming numbers -- and costing a fortune in lost tax dollars, a new study shows. More than 1.5 million state residents left for other parts of the United States from 2000 to 2008, according to the report from the Empire Center for New York State Policy. It was the biggest out-of-state migration in the country.
Why are they leaving? In great part due to the taxes imposed upon them. There are other reasons like the cost of living, but I'm going to focus on taxes.
"The average Manhattan taxpayer who left the state earned $93,264 a year. The average newcomer to Manhattan earned only $72,726."
Income tax in New York is about 10 percent. What that means is that the taxpayers who left were paying about $9,300 per year in state income taxes and the ones who replaced them are paying about $7,200 per year - a $2,100 shortfall in taxes. Since every single tax dollar (and more) is spent by the state something must be done to offset the shortfall. What can be done? Well, they could cut spending. Or they can raise taxes on everyone. Or they can raise taxes on the "rich."
Well now, the "rich" are those making around $73,000. So when their taxes get raised how will they pay their bills? Won't their disposable income go down? Of course it will but so what? They're rich - they can afford it. But wait a minute. Doesn't that mean they'll buy fewer things with their disposable income? So what? They don't need those "things."
When they don't buy those "things" some businesses will have to fire employees because they can no longer afford them. No big deal, they'll go on unemployment until they find a job. But won't that make the overall cost of unemployment go up? Sure. We'll raise taxes on the rich to pay for it. What will happen when we raise those taxes? More New Yorkers will leave and be replaced by people making even less money because of the laws of supply and demand - those unemployed people are looking for work and flooding the employee market which will drive down the cost of labor. You can see where this is going. Soon the homeless will be considered the new rich.
What happens to the ones who leave? Where do they go? They go to states which have lower taxes. That means they have more disposable income. What do they do with that disposable income? They spend it. What happens when they spend it? Jobs are created. What happens when jobs are created? A shortage of employees occurs - there is a greater demand for employees. Then what? Supply and demand comes into play again and wages go up. More disposable spending. More jobs. Higher wages. The states which end up with the tax refugees end up collecting more taxes without raising taxes. What does the state do with those additional taxes? Well, they spend it - creating even more jobs - or they pay down debt which leaves a surplus of revenue which can allow for lower taxes which leads to more disposable income, etc.
Even Forrest Gump could understand this - more taxes result in less revenue and lower taxes result in more revenue. More revenue results in more spending. More spending results in a higher standard of living for everyone - maybe even the mooches. Read more at oboner.com
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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